COVID funds allowed rural hospitals to make digital investments

While hospitals struggled to make ends meet during the pandemic, federal COVID-19 funds allowed many rural hospitals to invest in technology, according to Kelly Arduino, a healthcare industry leader for accounting firm Wipfli.

The funds themselves could not typically be used for digital investment, as they had to be COVID-related, but freed up money in other areas to invest, which many rural hospitals were not able to do before, Ms. Arduino told Becker's.

"COVID funds were not targeted for technology," Ms. Arduino said. "They were targeted for COVID-related expenses. However, it has had the positive effect of hospitals being able to use those funds for expenses and freeing up money to be able to invest in technology."

These investments were in areas like telehealth resources and enterprise resource planning systems, which reduce manual time to create reports for the hospital.

At Elma, Wash.-based Summit Pacific Medical Center — a client of Ms. Arduino — a $450,004 investment was made in IT, according to data shared with Becker's.

Summit Pacific CEO Josh Martin said the investment was important for offering telemedicine as the hospital was struggling with patient volume using the traditional method of seeing patients while many sheltered at home.

"How do we pay to innovate and create new delivery models when we're struggling financially because we don't have patients?" Mr. Martin said. "We had to break from that and find new funding streams."

He said telemedicine accounted for about 20 to 30 percent of patient visits in the early months because of the hospital's ability to launch these services.

"The idea is you think of it like the Blockbuster model where patients have to come to the hospital to receive care, versus the Netflix model where we go to the patient, we find them where they are, where they live, where they work, where they go to school," Mr. Martin said. "COVID has really amplified our efforts in our organization toward truly population health."

At Kirby Medical Center in Monticello, Ill. — also a client of Ms. Arduino — COVID-19 funds allowed the hospital to invest in more telemedicine as well, which CEO Steven Tenhouse said made care more efficient and cost-effective.

While the pandemic has been a source of struggle for Kirby Medical Center, Mr. Tenhouse said it allowed the hospital to see where it needed improvements.

"A crisis always tends to kind of cut through all of the tape," he said. "I guess that has been the one thing … it's forced everybody to realize what we needed and why we needed it."

But whatever financial improvements these investments made for rural hospitals may have been eroded by the delta variant of the coronavirus, Ms. Arduino said, which has caused a lot of strain for rural communities. However, it is too early to tell, she added.

One challenge many rural hospitals are facing when it comes to the delta variant is that provider relief funds are for rural patients, not rural hospitals, she said. So when a rural patient is transferred from a rural hospital to a more urban one, the urban hospital would get the funding.

"So monies that were going to go to rural in this next phase, are those going to be transferred to their urban counterparts just because of the place where the patient has been treated?" she said.

Ms. Arduino said she hopes that COVID-19 has brought to the forefront the importance of sustaining rural hospitals.

"COVID has certainly highlighted the difference in rural hospitals, depending on the amount of volume they had, depending on how financially secure they were coming into this," she said. "We also saw and are seeing the hospitals that were functioning on the edge, have been pushed farther to that edge.

"I'm hopeful that out of all of this, one of the things that comes about is the importance of having a rural hospital and having local care and the ability to viably maintain it."

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